CONSUMER REPORTS — If you’re struggling to pay your bills, you might be considering a payday loan. But be careful: even with some recent reforms, many of those loans still come with hefty fees and very high interest rates. The good news: there are alternatives – and as Consumer Reports explains, you just have to know where to look.
Missy Juliette was having trouble paying her rent, and overdue utility bills. As a last resort, she turned to payday lenders.
As Missy says “I had maxed out my credit cards and I had already asked my family for help in the
past so I couldn’t go to them again… I was embarrassed.”
Missy borrowed 730-dollars in two separate loans. One of those loans had a whopping 266-percent interest rate, and she had trouble paying them back.
And unfortunately, for millions of people like Missy who need emergency money fast, payday lenders are really one of the very few options out there. — But that could soon be changing.
Brian Vines, Consumer Reports Investigative Reporter says “The pandemic really exacerbated the problems with payday lenders, especially in low income and Black communities. So what we’ve seen is this push to bring better and fairer banking services to these communities.”
What can you do right now if you’re in need of emergency money fast? First, try and find a Community Development Financial Institution near you.
“CDFI’s are financial service providers, like a bank or a credit union, whose mission is to bring financial services to low-income communities, places that many traditional banks have largely excluded.” – Brian Vines, Consumer Reports Investigative Reporter.
Joining a CDFI can be affordable – offering banking services at no or low cost with
an initial deposit as small as 25-dollars.
Another avenue you can go is to find a nonprofit with a payment relief program. Which is what Missy eventually did, seeking help from Exodus Lending, a nonprofit dedicated to helping people get out of payday loan debt. They consolidated her loans for no fee and 0-percent interest.
Missy is in better financial shape. “So instead of 50 to 200 dollars in fees a month, I’m making an interest fee 80 dollars a month payment a year, and that helped so much.”